Malaysia Low Carbon and Resilient Cities is a Technical Assistance (TA) programme led by the World Bank’s Urban, Resilience, and Land Global Practice of East Asia & Pacific Region and funded by the City Climate Finance Gap Fund (Gap Fund). Eight (8) GCoM signatories namely Iskandar Malaysia, Johor Bahru, Muar, Segamat, Petaling Jaya, Shah Alam, Seberang Perai and Kota Kinabalu submitted a joint application in 2023 to access finance for implementing select solutions including monetization of carbon offsets as potential funding source and creating an operational platform for achieving urban decarbonization at scale. The programme which started in July 2024 aims to support Malaysia to achieve its net-zero and broader climate goals by advancing climate action at the local level. Following several months of desk research, virtual engagements and in-person consultations with key stakeholders from federal, state and local governments in November 2024 and February 2025, the World Bank Gap Fund TA team identified several key interventions that can facilitate the implementation of climate actions by Malaysian local governments. They include (i) establishment of funding and financing mechanisms that could assist in the mobilization of capital for low-carbon and resilient investments and (ii) a targeted workshop responsive to the Malaysian context that can upskill local government decision-makers on innovative financing instruments for low-carbon and resilient investments.
Objective of the City Climate Finance Academy
The bespoke Malaysian City Climate Finance Academy (CCFA) created a knowledge platform of various financing options that are accessible to local governments in Malaysia for a set of low-carbon and resilient investments and helped identify viable models that will facilitate the implementation of such projects. This directly responds to the participating eight (8) GCoM signatories’ request for capacity building on urban climate smart solutions, giving them an opportunity to work with World Bank’s coaches and specialists to deliver eight (8) project pitches to potential financiers — a critical process for developing actionable recommendations on federal funds and project preparation facility, which can enable local governments to implement climate actions.
Overall Summary and Key Takeaways
Opening Remarks by Mr. Apurva Sanghi, Lead Economist for Malaysia, World Bank focused on “Fostering Climate-Resilient City development in Malaysia” and this topic was further expanded to cover “The National and Local Government’s Role in Climate Finance and Action” by Ms. Yoonhee Kim, Practice Manager of Urban Resilience and Land Unit, World Bank.
The Team Task Leader of the World Bank Gap Fund TA Team, Ms. Narae Choi, Senior Urban Specialist, World Bank provided Malaysia Low Carbon and Resilient Cities Technical Assistance Progress and Findings as follows. Climate Resilience Ambition & Needs: Malaysian local authorities embody an essential role in translating broad national climate commitments into actionable, locally relevant solutions; setting ambitious targets that surpass national climate commitments. Adaptation and resilience, historically less prioritized, are gaining prominence due to direct municipal experience with climate-related impacts like flooding and heat stress. Implementation/Delivery Challenges: Turning ambitious plans into action remains a challenge at the local level. Particularly, high-impact, capital investments are limited. The local delivery gap is largely due to three cross-cutting constraints—technical capacity, funding limitations, and governance fragmentation. Mr. Chandan Deuskar, Urban Specialist, City Climate Finance Gap Fund, World Bank session was on “Global perspectives on Cities and Climate Finance” and the publication on “Banking on Cities: Investing in Resilient and Low-Carbon Urbanisation” will be released on 4 June 2025. Ms. Suraya Sani, Deputy Director, Sustainability Unit, Central Bank of Malaysia provided a detailed briefing to the city governments on “Climate Finance Innovation Lab (CFIL)/ BNM: Emerging opportunities for funding climate initiatives sponsored by local governments” and the plenary session concluded with Mr. Marc Forni, Lead Specialist for Urban Resilience and Disaster Risk Management sharing of “Case Study: Carbon market project developments in Thailand” with proposals on how it can be replicated in Malaysia successfully.
The Plenary commenced with “Introduction to Municipal Finance in Malaysia” by Mr. Jeremy Gorelick, Development Finance Specialist, World Bank Gap Fund TA Team. In depth sharing on “Sustainable Public Private Partnership (PPP) for Subnational Infrastructure” was delivered by Ms. Jackie Jiang, Senior PPP Specialist, World Bank by outlining sub-national governments’ priorities, providing key insights on preliminary considerations, financial aspects, how to overcome technical issues, managing diversified risks and how PPPs are funded in reality. She also shared three real life successful case studies and annual savings of governments with the Malaysian government participants: Bhubaneswar Street-lighting, India, Scaling e-buses- Santiago, Chile (GCoM City) and Solid Waste Treatment Project – Ho Chi Minh City, Viet Nam (read more) which can be replicated in Malaysia. The session on “Global Experience in Using Land Value Capture and Urban Planning Instruments for Mitigation and Adaptation” was delivered by Mr. Jon Kher Kaw, Senior Urban Development Specialist, World Bank. He shared nine successful real-life case studies, which included seven (7) GCoM Cities: Tokyo Azubudai Hills, Washington DC’s public land and assets (former public library converted to subsidized apartments, retail, squash courts, fire station and parking), Funan Mall in Singapore (greenery and public spaces in return for density and/or height bonuses), Ahmedabad in India (land reassembly and opening up of riverfront), New York’s tax increment financing (TIF)-type mechanism to finance infrastructure including extension of a subway line, the regeneration of Rio de Janeiro’s historic area near Bay, managing tradable additional development rights to support urban renewal like Sao Paolo’s CEPACs, Hong Kong SAR’s “Rail plus Property” model, and Amman’s (Jordan) high-density urban areas with ample public spaces and better last-mile access to transit.
Project Preparation by Local Governments
Mr. John Hosung Lee, Urban Specialist, World Bank invited 20+ representatives from the Federal and State government ministries and agencies to provide feedback to the eight (8) GCoM signatories after they presented their selected projects to the World Bank’s coaches and specialists before the sectoral deep dives on flood risk management, energy efficiency and solid waste management.
The list of projects which were also the focused for Day 2 pitch sessions before financiers were:
- Iskandar Malaysia’s Water Sensitive Urban Design towards Flood Risk Management
- Kota Kinabalu’s Low Carbon City Resilient Programme and From Landfills to Powerfield: Converting Legacy Landfills into Renewable Energy Assets
- Muar’s Facility to Process Municipal Solid Waste and Organic Waste using Anaerobic Digestion System to Produce Biogas, Organic Fertilizer, Recycled Goods at Muar’s Furniture Park
- Shah Alam’s New Nature-based Solution Playscape: Climate-Resilient Urban Recreational Hub
- Smart Solar Street Lights at Seberang Perai
- Johor Bahru’s Flood Emergency Response Integrated Network and System – FERINS
- Transition to Solar Powered Streetlights in Old Town Segamat
- Petaling Jaya’s Green Corridor: Monsoon Drain to River Life Connectivity for Seksyen 8 and Seksyen 51
Sectoral Deep Dive: Flood Risk Management /Climate Adaptation Solutions
The objective of this very interactive session was to provide an opportunity to the city government officials to have interactive discussions with the coaches and specialists together with the Federal and State government officials providing inputs and insights. To equip the Malaysian federal, state and city government officials with financial strategies for urban flood resilience, the experts used GCoM cities’ (Tirana, Can Tho and Wrocław) high impact projects to illustrate key points. Mr. Ditjon Baboci, Climate Adaptation Consultant, World Bank Gap Fund TA Team shared some EU’s best practices on financing mechanisms and case studies from Tirana, Albania namely projects like the Skanderbeg Square, which he was involved when he was working for the Municipality of Tirana. Mr. Marc Forni, Lead Specialist for Urban Resilience & Disaster Risk Management shared how Can Tho (Vietnam) increased their physical, financial and social resilience to overcome adverse hydro-meteorological disasters. The implementation of the urban development and resilient project (2016-2024) resolved six (6) key challenges (urban flood, health & economy, capacity issues, vulnerable groups, infrastructure issues and climate change) and the city has not experienced a flood ever since the completion of the project. The large flood risk management investment program from Wroclaw Poland, supported by the World Bank showcased the successful implementation of nature-based solutions, demonstrated the impact of how reduced flood risks resulted in land and property in formerly vulnerable areas becoming much more attractive and valuable, resulting in substantial increases in revenue to support new adaptation investments and loan paybacks.
Sectoral Deep Dive: Energy Efficiency and Solid Waste Management
Ms. Jade Wong, Infrastructure Finance Specialist supported by Ms. Jackie Jiang, Senior PPP Specialist, World Bank led the interactive discussions in this breakout session focusing on local PPP business models for decentralized/on-site solid waste management by providing the Federal, State and local government officials successful examples from Go Circular (Singapore), Zero Waste Living Lab (Indonesia), The Hive Bulk Foods (Malaysia), Micro Greentech (Thailand), GAEA (Cambodia) and DeSpray (Australia). One successful city project implemented by the Department of Environment and Natural Resources (DENR) Philippines was the Boracay Green Economy Model Sites Rehabilitation and how its replicable model would be implemented in five more ecotourism areas like Coron, El Nido, Panglao, Puerto Galera and Siargao. They also covered GIF project deep dives on developing pilot transactions such as Brazil’s Municipal Street Lighting (read more) for two (2) high impact projects from two (2) GCoM Cities namely: Belo Horizonte first large scale 180,000 streetlights and Rio de Janeiro’s 450,000 Streetlight and Smart City projects (read more).
World Bank Coaches and Specialists with local governments assisting them in their flood risk management, energy efficiency and solid waste management projects
Local Climate Action Feedback by Panel of Financiers and Wrap-up Sessions
We would like to express our heartfelt appreciation to Yang Mulia Raja Amir Shah Raja Azwa, CEO of HSBC Amanah, Mr. Joel Khaw, Head of MIND & Sustainability Group Corporate Development Office, Bank Pembangunan Malaysia Berhad and Ms. Shahira Johan, Senior Financial Sector Specialist, World Bank FCI for providing valuable feedback to each city government official who represented their cities during the pitches. The inputs, feedback and insights from all experts and stakeholders collated during Day 1 and Day 2 of the City Climate Finance Academy will be collated and compiled in the Climate Action Planning Handbook for Malaysian Local Authorities by Mr. Anirudh Rajashekar, Senior Urban Consultant, World Bank Gap Fund TA team and his colleagues. We would also like to extend our appreciation to all the staff at World Bank Malaysia office for supporting the World Bank Gap Fund TA team in logistics, event management and administrative support and to the World Bank coaches, specialists and speakers from Republic of Korea, Singapore, Vietnam, Thailand, Indonesia, Republic of China, South Africa and Washington D.C. USA.
Other Resources by World Bank Experts:
- World Bank PPP Resource Centre: https://ppp.worldbank.org/public-private-partnership/
- Subnational and Municipal PPPs: https://ppp.worldbank.org/public-private-partnership/ppp-sector/sub-national-and-municipal-ppps/sub-national-and-municipal-ppps
- Land Value Capture: Guidance for Practitioners: https://www.oicrf.org/-/land-value-capture-guidance-for-practitioners
- Global Compendium of Land Value Capture Policies: https://www.oecd.org/en/publications/global-compendium-of-land-value-capture-policies_4f9559ee-en.html
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